Chile forges closer economic relations with China. Chile's ambassador to China, Jorge Heine, expects Santiago to become the regional platform for the RMB in Latin America, following the Prime Minister Li Keqiang's visit and the currency swap agreement, signed on May 24-25.
The agreement was signed between the Ministry of Public Works of Chile and the China Development Bank. China Development Bank will be informed of all projects initiated from the Ministry, so that it can provide information to prospective bidders in China.
China Construction Bank Corp (CCB), the country's second biggest lender, is set to start operations in Chile to facilitate the use of RMB in Chile. A memorandum of understanding has been signed. Chile is expecting CCB to start operations in few months and become the clearing bank for all RMB transactions in Latin America.
The investment will be restricted to qualified institutional investors, such as banks, hedge funds, and insurance companies. "Chile is the first country to begin this access to the Chinese mainland financial market. This package allows a very significant step forward in financial cooperation between Chile and China," said Ambassador Heine.
Trade between Chile and China was more than 34 billion U.S. dollars in 2014, or 23 percent of Chile's total foreign trade. "We understand the Chinese consumers have new demands and we would like to understand those demands, we want to respond to those demands," said Ambassador Heine.
Chile is the second largest exporter of wine to China, the second largest exporter of fresh fruit to China, the country exports salmon, sea products and meat.
Following Prime Minister Li's visit to Santiago in May, 18 agreements have been signed between the Chilean and Chinese government, the most important being a double taxation avoidance agreement (DTA), updated Free Trade Agreement, agreement on setting up an RMB clearing centre in Chile and the extradition treaty. The others cover fields such as trade, finance, public infrastructure facilities construction, energy, industrial capacity cooperation, astronomy and cultural exchanges.
